Month: May 2015

Beginning with the end in mind means getting in touch with your deepest core values and clearly visualizing what you want.

Let’s apply visualization to our financial life: Are you where you want to be financially? To make a financial shift, you will need to open your mind to change and new possibilities. Once you determine what goals you would like to achieve, planning the next steps is key to success.

I believe that one of the most important ways to bring about change is through visualization. This technique involves envisioning your future with a new perspective (rather than as an extension of your current reality). You may see yourself with an abundance of money or paid up on all your credit card debt or driving a new car. If you can’t visualize how your future could be, it is difficult to believe you can take the necessary steps to get there.

Many people say that you only need to believe in something to make it come true. Here is something that should come as no secret to most of you: success requires consistent effort.

Yes, I believe that it is important to visualize your future in order to make changes. However, if your reality keeps reflecting something different than what you envision, you may need to put in a few more hours or revise your strategy.

Envision what you want, tell yourself it can happen and draft a plan. Here’s a great example:

Sam, a client of mine, had always wanted to own his own business. He didn’t have specific details; he just knew he had a dream. Sam worked in a business park and there was no convenient place for a quick lunch. Each day, he’d come to work and think, “This place needs a sandwich shop.” He realized there might be an opportunity to open his own business and began to envision the details of his dream.

He made some plans and worked out all of the financial details for his own sandwich shop. He would offer a limited variety of Panini sandwiches (two types of cheese, two types of meat), canned soda or bottled water, and two types of chips. He determined that meal prices at ten dollars or less would attract lunch customers. He decided to lease four Panini machines for the first six months (rather than purchase them) in case the restaurant didn’t work out.

He needed a certain amount saved up before launching his plan. If the business took off in six months, he would continue building his sandwich shop business. If not, he would be able to get out without long-term debt. His exit strategy was in place. He saw a need and envisioned himself filling it. To his credit, Sam now owns a thriving sandwich shop.

What are your goals for this summer season? Setting your end result firstwill pave the way for change!
Bob

What is the real cost of careless money management or your lack of decision making?

Choosing to look the other way, sticking your head in the sand when “things” get overwhelming or not assessing your current financial situation can become your default method of reacting to life. Instead, select how you want your life to unfold.

Hidden costs show up on many levels. There are COSTS that cannot be seen or are not included in a purchase that can often affect you negatively in the future.

Smoking is a good example; a pack of cigarettes may cost you five bucks today. Be aware of the implications from hidden costs. Decreased health and a higher cost of insurance and medical bills due to lung cancer may be a much greater cost than you want to pay in the long run. Those high health bills could be a hidden cost that most people don’t ever expect to face, but studies have shown are a real risk.

Another example is the hidden cost of winning. My aunt used to win every contest she ever entered. Of course, as a child, I thought this talent for winning was the greatest! However, there were numerous costs associated with every FREE prize. One year my aunt won a boat. She and my uncle were so excited, they named the boat “Wee Won.” First they had to pay extra income taxes on the free boat. Second, they had to purchase boat insurance. And third, they needed to buy a trailer so they could get it to the ocean and back to the house. Next they took lessons because neither one of them knew anything about boating. Then, of course, each trip required a tankful of gasoline to zip out into the ocean! Honestly, they LOVED that boat and had years of enjoyment, but they also spent tons of money on that one free gift!

Let’s zoom in on one hidden cost many of us are affected by and may not always know about. That is the ever-increasing interest rates that credit card companies and banks charge for the privilege of using their services. This is an area where buyers really need to be smart.

Invest some time into exploring various vendors. Investigate what their rates are and what happens to that rate if you make one late payment. You may pay the full amount due on time and still get hit with interest charges if you pay after the billing cycle ends. That doesn’t seem fair, does it?

Also, check to see if the interest rate goes up after your first year. That 0 % card may be great for the first year and then it may balloon up to 17% or 23% moving forward. That is a huge chunk of your hard-earned money! If you work to keep your credit score high, you will be rewarded with better rates, some as low as 7% for select credit cards.

Be curious and shop for the best deal you can find. It will save you thousands of dollars in a five-year period! Knowing what all the hidden costs are will help you make the best decision. You now have a more complete picture of how you manage your dollars, your cost of doing business and staying focused on a few long-term goals.

If you slip up and overuse credit cards, put a freeze on them – literally! Fill up a container with water, dump your cards in there and stash them in the freezer. You may have a burning urge to use them, but by the time the ice melts, the urge may have cooled!

Use your knowledge and a little bit of humor to take back your power and choose the best direction for your financial freedom!

Fortunately, there is a way to take action. To get an honest assessment of your situation, you can make a list of all the money coming in and going out. Once you know the reality of your current lifestyle, you can change it. No judgment, no self blame.

Look at your paycheck. You must create a budget based on the figure that is actually deposited in the bank. If you base your plan on $1,000 per week when your take-home pay is really $750, you aren’t being fair to yourself and will always go over your budget!

Now you have jotted down all the numbers. Surprised? Now is the time to be honest and take action.

The next step is the tricky one. Write down ALL the things you spend your money on. EVERYTHING! Don’t be bashful. If it’s embarrassing, list it as personal or give it a “code name.”

See if you are saving any money. If you have no savings plan, create a small savings habit. Set it up as an automatic draft or debit from your checking account into a savings account. This will help you create a new habit and learn to pay yourself consistently. Explore what saving is all about. It is not a punishment or a painful experience. It is simply a gift to yourself and your future. It is exciting to see how a strong foundation of saving quickly grows into a substantial investment. Save first and then spend your extra dollars.

If you totaled up all the income you would make in your lifetime, it will easily add up to over a million dollars. Wow! Who knew? Invest in yourself – you can do it!